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ANC MPs see nothing wrong with Denel deal

Sep 07 2016 20:10
Liesl Peyper

Cape Town - ANC MPs who stayed behind when the Economic Freedom Fighters and the Democratic Alliance walked out during a parliamentary committee meeting seemed convinced that there was nothing untoward about state-owned entity Denel's controversial venture with VR Laser Asia.

During a parliamentary briefing of the public enterprises committees of the National Assembly and National Council of Provinces on Wednesday, Denel’s board chairperson, acting CEO and acting financial executive officer insisted that Denel had followed the correct procedures in establishing a deal with VR Laser Asia.

Before the presentation started, members of the DA and EFF staged a walkout when committee chairperson Dipuo Letsatsi-Duba refused to reschedule the meeting.

Opposition parties wanted the meeting moved to the end of September to allow Finance Minister Pravin Gordhan and Public Enterprises Minister Lynne Brown to be present so they could get a full account of the controversial deal.

Letsatsi-Duba however ruled that Denel go ahead with its briefing.

READ: We won't be part of Denel cover-up, looting - DA, EFF

In its presentation, Denel’s acting chief financial officer Odwa Mhlwana said National Treasury and the department of public enterprises had been informed of the intended deal as early as October last year. “[The parties involved] knew the matter was urgent and in subsequent meetings there were no objections.”

Mhlwana indicated that Denel decided to go ahead with the deal on January 29 this year, as it did not have “a single communication” from National Treasury about the intended deal.

“At that point it was 47 days since our formal application (to have the deal authorised) and 91 days from our initial submission. But there was no comment. No ‘give us more time or information’ – nothing.”

In February, shortly after the establishment of the joint venture, National Treasury objected to Denel’s deal with VR Laser Asia, arguing that it was in contravention of the Public Finance Management Act (PFMA). Legislation requires a state-owned company to hand in a Section 54 application if it wants to enter into a joint venture, which Denel has not done.

READ: Denel tears into Gordhan, defends Guptas

Mhlwana said there was nothing wrong with the process Denel followed. “And our shareholder ministry (public enterprises) came to the exact same conclusion.”

He insisted that the process of finding a business partner, as was the case with VR Laser Asia, is not the same as a procurement process, which is subject to the PFMA. “The partner must put money on the table and we (Denel) must dictate what happens in the business,” Mhlwana said.

After the presentation, the ANC's Ellen Prins, chairperson of the select committee on public enterprises, concluded that from what she had heard she couldn’t find fault with the processes followed by Denel.

“Members of the opposition speak about a ‘Denel scandal’, but I see no scandal. I agree that the opposition must keep government on its toes, but we really have to work together for the betterment of all in this country. Good things are also happening at Denel,” she said.

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